JOHN C. GOWER CFP, EA
Item 1 – Cover PageDisclosure BrochureForm ADV, Part 2JOHN C. GOWER, CFP, EAFee-Only Financial Planning & Investment Management Services9131 Watson Industrial Park, Suite 207St. Louis, MO 63126(314) 961-2092www.jcgower.comSeptember 1, 2018This Brochure provides information about the qualifications and businesspractices of John C. Gower, CFP, EA (Adviser). If you have any questions aboutthe contents of this Brochure, please contact us at (314) 961-2092 orjohn@jcgower.com. The information in this Brochure has not been approved orverified by the United States Securities and Exchange Commission or by anystate securities authority.John C. Gower, CFP, EA is a registered investment adviser. Registration of anInvestment Adviser does not imply any level of skill or training. The oral andwritten communications of an Adviser provide you with information about whichyou determine to hire or retain an Adviser.Additional information about John C. Gower, CFP, EA is also available on theSEC’s website at www.adviserinfo.sec.gov.i
Item 2 – Material ChangesOn July 28, 2010, the United State Securities and Exchange Commissionpublished “Amendments to Form ADV” which amends the disclosure documentthat we provide to clients as required by SEC Rules. This Brochure datedSeptember 1, 2018 is a new document prepared according to the SEC’s newrequirements and rules. As such, this Document is materially different in structureand requires certain new information that our previous brochure did not require.In the future, this Item will discuss only specific material changes that are madeto the Brochure and provide clients with a summary of such changes. We willalso reference the date of our last annual update of our brochure.In the past we have offered or delivered information about our qualificationsand business practices to clients on at least an annual basis. Pursuant to newSEC Rules, we will ensure that you receive a summary of any materials changesto this and subsequent Brochures within 120 days of the close of our business’fiscal year. We may further provide other ongoing disclosure information aboutmaterial changes as necessary.We will further provide you with a new Brochure as necessary based on changesor new information, at any time, without charge.Currently, our Brochure may be requested by contacting John C. Gower, CFP,EA at 314-961-2092 or john@jcgower.com. Our Brochure is also available on ourweb site www.jcgower.com free of charge.ii
Item 3 -Table of ContentsItem 1 – Cover Page . iItem 2 – Material Changes. iiItem 3 --Table of Contents . iiiItem 4 – Advisory Business.1Item 5 – Fees and Compensation.2Item 6 – Performance-Based Fees and Side-By-Side Management .3Item 7 – Types of Clients .3Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss .4Item 9 – Disciplinary Information .6Item 10 – Other Financial Industry Activities and Affiliations.6Item 11 – Code of Ethics.7Item 12 – Brokerage Practices .8Item 13 – Review of Accounts .8Item 14 – Client Referrals and Other Compensation.9Item 15 – Custody.9Item 16 – Investment Discretion.9Item 17 – Voting Client Securities .9Item 18 – Financial Information .10Item 19 – Requirements for State-Registered Advisers .10iii
Item 4 – Advisory BusinessJohn C. Gower, CFP, EA provides a variety of financial planning and advisoryservices to clients on a fee-only basis. My practice concentrates primarily onmanaging investment assets for individuals, families, small businesses, trusts, andretirement plans. I have been providing these services since 1985. These assetsare managed on a discretionary basis and totaled 27 million plus or minus as ofSeptember 1, 2018.What sets my approach apart is that it focuses all efforts on the goals of theclient. As an independent financial planner and investment advisor, I representyou, sort of like a buyer’s agent. Being compensated directly by the clientensures a high degree of objectivity. All commission-based financial advisors (i.e.salesmen) represent the company they work for; not you, which poses aninherent conflict of interest. It is important that you receive impartial andunbiased advice, and that you have access to high quality products andservices with minimal cost and maximum flexibility. My goal is to improve theefficiency of your financial situation by providing objective information andadvice regarding the management of your assets.Fee-only financial advisors believe there is a significant conflict of interest if theystand to gain financially from the purchase of any product they recommend toclients. They are a minority of the practicing financial advisors. Some financialadvisors receive all of their compensation from the provider of the products theyrecommend and sell. These products commonly include load mutual fundsand/or high-cost insurance products.Using a fee-only financial advisor means a client can be reasonably assuredthat unbiased suggestions are being made.The first meeting is complimentary and consists of a relaxed and thoughtfuldiscussion of our services and to determine if there is a basis for us to do business.Products & Services Offered: Investment PlanningRetirement Planning and Employee BenefitsMutual Funds (always no-load, never a commission)ETFs (exchange-traded funds)Stocks and BondsCDs1
REITsNo-Load/Low-Load Insurance ProductsTax Preparation and PlanningTraditional IRARoth IRARollover IRARetirement Plans for Small Business (SEP, SIMPLE, 401(k))Section 529 College Savings PlansCoverdell Education Savings AccountBudgeting and Cash Flow ManagementBasic Estate PlanningFor more information, go to: www.jcgower.comItem 5 – Fees and CompensationJohn C. Gower, CFP, EA is a fee-only advisor. Fee-only financial advisors arecompensated solely from fees paid by their clients. I do not accept referral fees,commissions, or any other payment for recommending specific products.The specific manner in which fees are charged by John C. Gower, CFP, EA isestablished in a client’s written agreement with John C. Gower, CFP, EA. JohnC. Gower, CFP, EA will generally bill fees on a quarterly basis in arrears after theend of each calendar quarter. Fees are deducted directly from client accountsvia the aforementioned client agreement. Clients may elect to be billed directlyfor hourly fees or to authorize John C. Gower, CFP, EA to directly debit fees fromclient accounts. Accounts initiated or terminated during a calendar quarter willbe charged a prorated fee.Fees are based on a percentage of assets under supervision/managementand/or hourly rates. Fee schedule as follows:Financial Planning Services:Initial meeting/consultationN/CHourly rate for consultations 1152
Investment Management & Advisory Services:Fees stated are annual rates and are billed after the end of each calendarquarter (4 times per year) at ¼ the annual rate. (includes any related financialplanning services - minimum fee of 100/qtr or 400/yr)Account Value 0 to500,000 500,001 to 1,000,000 1,000,001 Fixed income oriented accountsFee Rate1.00%.75%.50%.50%Fees are negotiable.Adviser’s fees are exclusive of brokerage commissions, transaction fees, andother related costs and expenses which shall be incurred by the client. Clientsmay incur certain charges imposed by custodians, brokers, third partyinvestment and other third parties such as fees charged by managers, custodialfees, deferred sales charges, odd-lot differentials, transfer taxes, wire transferand electronic fund fees, and other fees and taxes on brokerage accounts andsecurities transactions. Mutual funds and exchange traded funds also chargeinternal management fees, which are disclosed in a fund’s prospectus. Suchcharges, fees and commissions are exclusive of and in addition to Adviser’s fee,and Adviser shall not receive any portion of these commissions, fees, and costs.Item 6 – Performance-Based Fees and Side-By-Side ManagementJohn C. Gower, CFP, EA does not charge any performance-based fees (feesbased on a share of capital gains on or capital appreciation of the assets of aclient).Item 7 – Types of ClientsJohn C. Gower, CFP, EA provides portfolio management and other services toindividuals, high net worth individuals, small businesses, trusts, and retirementplans.3
Item 8 – Methods of Analysis, Investment Strategies and Risk of LossInvestment PhilosophyI provide strategic asset allocation services utilizing primarily no-load mutualfunds and exchange-traded funds (ETFs), and can tailor accounts for objectivesfrom capital conservation and income to aggressive growth. Great emphasis isplaced on matching client needs with appropriate strategies, systematic riskcontrol, and cost containment.Following a disciplined process for managing your investments can add valueby enhancing returns, reducing risk, and increasing the likelihood of achievingyour goals. I believe in diversification and asset allocation. Diversifying aninvestment portfolio among several different asset classes and among differentinvestment vehicles is an effective and proven technique for helping to reduceoverall portfolio volatility and risk.My investment philosophy is based on five principles: Asset allocationPortfolio structureTax managementSpecialist managersContinuous portfolio managementThese principles work together to deliver a program that offers youdiversification, coordination and management. Portfolios should be managedwith strict adherence to jointly established guidelines.Each portfolio is an individualized effort created to address short- and long-termneeds and goals. Some portfolios are designed to reduce taxes or maximizecurrent income potential; others are more oriented for growth.Investing in securities involves risk of loss that clients should be prepared to bear.Every type of investment, including mutual funds and ETFs, involves risk. Riskrefers to the possibility that you will lose money (both principal and any earnings)or fail to make money on an investment. A fund's investment objective and itsholdings are influential factors in determining how risky a fund is. Reading theprospectus will help you to understand the risk associated with that particularfund.4
Generally speaking, risk and potential return are related. This is the risk/returntrade-off. Higher risks are usually taken with the expectation of higher returns atthe cost of increased volatility. While a fund with higher risk has the potential forhigher return, it also has the greater potential for losses or negative returns. Theschool of thought when investing in mutual funds suggests that the longer yourinvestment time horizon is the less affected you should be by short-termvolatility. Therefore, the shorter your investment time horizon, the moreconcerned you should be with short-term volatility and higher risk.Mutual funds and ETFs face risks based on the investments they hold. Forexample, a bond fund faces interest rate risk and income risk. Bond values areinversely related to interest rates. If interest rates go up, bond values will godown and vice versa. Bond income is also affected by the change in interestrates. Bond yields are directly related to interest rates falling as interest rates falland rising as interest rise. Income risk is greater for a short-term bond fund thanfor a long-term bond fund.Similarly, a sector stock fund (which invests in a single industry, such astelecommunications) is at risk that its price will decline due to developments inits industry. A stock fund that invests across many industries is more shelteredfrom this risk defined as industry risk.Following is a glossary of some risks to consider when investing in mutual fundsand ETFs. Call Risk. The possibility that falling interest rates will cause a bond issuer toredeem—or call—its high-yielding bond before the bond's maturity date. Country Risk. The possibility that political events (a war, national elections),financial problems (rising inflation, government default), or naturaldisasters (an earthquake, a poor harvest) will weaken a country'seconomy and cause investments in that country to decline. Credit Risk. The possibility that a bond issuer will fail to repay interest andprincipal in a timely manner. Also called default risk. Currency Risk. The possibility that returns could be reduced for Americansinvesting in foreign securities because of a rise in the value of the U.S.dollar against foreign currencies. Also called exchange-rate risk. Income Risk. The possibility that a fixed-income fund's dividends willdecline as a result of falling overall interest rates.5
Industry Risk. The possibility that a group of stocks in a single industry willdecline in price due to developments in that industry. Inflation Risk. The possibility that increases in the cost of living will reduce oreliminate a fund's real inflation-adjusted returns. Interest Rate Risk. The possibility that a bond fund will decline in valuebecause of an increase in interest rates. Manager Risk. The possibility that an actively managed mutual fund'sinvestment adviser will fail to execute the fund's investment strategyeffectively resulting in the failure of stated objectives. Market Risk. The possibility that stock fund or bond fund prices overall willdecline over short or even extended periods. Stock and bond marketstend to move in cycles, with periods when prices rise and other periodswhen prices fall. Principal Risk. The possibility that an investment will go down in value, or"lose money," from the original or invested amount.To ensure I have all the most current and up-to-date information needed todevelop and monitor your financial plan, I make an effort to use the latesttechnological and information systems in addition to various professional tradepublications.Item 9 – Disciplinary InformationRegistered investment advisers are required to disclose all material factsregarding any legal or disciplinary events that would be material to yourevaluation of John C. Gower, CFP, EA or the integrity of management. John C.Gower, CFP, EA has no information applicable to this Item.Item 10 – Other Financial Industry Activities and AffiliationsJohn C. Gower, CFP, EA also provides tax preparation and general financialplanning services.6
Item 11 – Code of EthicsJohn C. Gower, CFP, EA has adopted a Code of Ethics describing a highstandard of business conduct, and fiduciary duty to clients outlined as follows:CFP Code of Ethics and Professional ResponsibilityPrinciple 1 – Integrity: Provide professional services with integrity.Integrity demands honesty and candor which must not be subordinated topersonal gain and advantage. Certificants are placed in positions of trust byclients, and the ultimate source of that trust is the certificant’s personal integrity.Allowance can be made for innocent error and legitimate differences ofopinion, but integrity cannot co-exist with deceit or subordination of one’sprinciples.Principle 2 – Objectivity: Provide professional services objectively.Objectivity requires intellectual honesty and impartiality. Regardless of theparticular service rendered or the capacity in which a certificant functions,certificants should protect the integrity of their work, maintain objectivity andavoid subordination of their judgment.Principle 3 – Competence: Maintain the knowledge and skill necessary toprovide professional services competently.Competence means attaining and maintaining an adequate level ofknowledge and skill, and application of that knowledge and skill in providingservices to clients. Competence also includes the wisdom to recognize thelimitations of that knowledge and when consultation with other professionals isappropriate or referral to other professionals necessary. Certificants make acontinuing commitment to learning and professional improvement.Principle 4 – Fairness: Be fair and reasonable in all professional relationships.Disclose conflicts of interest.Fairness requires impartiality, intellectual honesty and disclosure of materialconflicts of interest. It involves a subordination of one’s own feelings, prejudicesand desires so as to achieve a proper balance of conflicting interests. Fairness istreating others in the same fashion that you would want to be treated.Principle 5 – Confidentiality: Protect the confidentiality of all client information.7
Confidentiality means ensuring that information is accessible only to thoseauthorized to have access. A relationship of trust and confidence with the clientcan only be built upon the understanding that the client’s information willremain confidential.Principle 6 – Professionalism: Act in a manner that demonstrates exemplaryprofessional conduct.Professionalism requires behaving with dignity and courtesy to clients, fellowprofessionals, and others in business-related activities. Certificants cooperatewith fellow certificants to enhance and maintain the profession’s public imageand improve the quality of services.Principle 7 – Diligence: Provide professional services diligently.Diligence is the provision of services in a reasonably prompt and thoroughmanner, including the proper planning for, and supervision of, the rendering ofprofessional services.Item 12 – Brokerage PracticesJohn C. Gower, CFP, EA recommends the use of TD Ameritrade InstitutionalServices for custodial services because of their competitive fee structure, serviceand broad range of product availability. John C. Gower, CFP, EA works on afee-only basis, accepts no commissions and is not affiliated with TD AmeritradeInstitutional Services.Some larger client accounts are directed to SEI Investments due to theirexpertise in tax-managed investment management and service to high networth investors.Item 13 – Review of AccountsClient accounts are generally reviewed quarterly. Reviews may be conductedfor time frames other than quarterly per client request. Accounts are tracked byusing professional level investment software and are reconciled with clientbrokerage statements monthly.Monthly account statements are received by the client from the brokerage orother custodian through which investments are purchased. Portfolio appraisalsand performance reports are provided at least annually by John C. Gower, CFP,8
EA. These and various other reports such as cost basis, etc. can be provided forany time frame upon client request.Item 14 – Client Referrals and Other CompensationJohn C. Gower, CFP, EA is compensated solely from clients on a fee-only basis,and has absolutely no formal referral or other compensation arrangements.Item 15 – CustodyClients receive monthly statements from TD Ameritrade Institutional Serviceswhere client investment assets are held and maintained. John C. Gower, CFP,EA urges you to carefully review such statements and compare such officialcustodial records to the account statements that we may provide to you.Item 16 – Investment DiscretionJohn C. Gower, CFP, EA receives trading authority from the client through alimited power of attorney (on account application) at the outset of an advisoryrelationship to select the securities to be bought or sold. Adviser shall act onbehalf of client to execute transactions with respect to account assets on adiscretionary basis. Transactions will be exercised in a manner consistent with thestated investment objectives for the particular client account.When selecting securities and determining amounts, Adviser observes theinvestment policies, limitations and restrictions of the clients for which it advises.Item 17 – Voting Client SecuritiesAs a matter of firm policy and practice, John C. Gower, CFP, EA does not haveany authority to and does not vote proxies on behalf of advisory clients. Clientsretain the responsibility for receiving and voting proxies for any and all securitiesmaintained in client portfolios.9
Item 18 – Financial InformationA. Does not apply. Adviser does not require or solicit prepayment of more than 1200 ( 500 for state registered advisers) in fees six months or more in advance.B. Adviser has no financial commitment that impairs its ability to meetcontractual and fiduciary commitments to clients.C. Adviser has never been the subject of a bankruptcy proceeding.Item 19 – Requirements for State-Registered AdvisersA. John Cross Gower.Year of birth: 1958Formal education after high school:John A. Logan College, Accounting major, 1978-79, Dean's ListCollege For Financial Planning, Personal Financial Planning, 1990-1992, CFPLicenseeWebster University, Finance major, 1994Enrolled Agent, August, 1998Business background for the preceding five years:Since 1996 I have been a self-employed financial planner and investmentadvisor.Plaza Financial Advisors, Clayton, MOFinancial Planner/Analyst1994-1996Grace & Company, P.C., St. Louis, MOCertified Public Accountants1992-1994Independent Financial Planner, Key Largo, FL1988-1992The America Group, St. Louis, MOFinancial Planner1986-1988Penncorp Financial, St. Louis, MOInsurance Agent1985-1986B. Adviser also provides tax preparation services which accounts for roughly 10%of business.10
inversely related to interest rates. If interest rates go up, bond values will go down and vice versa. Bond income is also affected by the change in interest rates. Bond yields are directly related to interest rates falling as interest rates fall and rising as interest ris
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